Royal Bank of Scotland wins more time to mount defence against £4bn lawsuit from shareholders

Royal Bank of Scotland has won more time to mount a defence against a £4bn lawsuit from shareholders.

Mr Justice Hildyard, who will examine the claim by RBS shareholders, allowed the bank to push the deadline back from next Friday to December 13.

The delay will result in mounting costs for groups seeking redress from the taxpayer-owned bank.

Delay: Mr Justice Hildyard, who will examine the claim by RBS shareholders, allowed the bank to push the deadline back from next Friday to December 13

Two groups of investors allege that
the bank misled them when it invited shareholders to buy into its £12bn
rights issue in 2008.

They claim that the rights issue prospectus painted the cash call as an exercise in caution, rather than an emergency measure.

The
bank had to be rescued with a £45bn taxpayer-funded bailout just months
later. Between them, the two groups are seeking more than £4bn from
RBS.

The case is
expected to put former RBS chief executive Fred Goodwin in the witness
box for the first time to answer for his disastrous stewardship of the
bank.

Plaintiffs were
handed a major boost in September when four large financial institutions
revealed they were also considering joining the action.

Prudential
and Universities Superannuation Scheme (USS) were named as interested
parties in court, as were fund management giants Standard Life and Legal
& General.

The
quartet had previously steered clear of suing RBS. Their change of heart
is believed to have been spurred by a little-known legal opinion issued
in Scotland, which said institutional investors could find themselves
liable for action by their clients if they do not join in an action that
proves successful. RBS declined to comment on the deadline extension.